Veeco Instruments Inc. (NASDAQ:VECO) Q3 2019 Earnings Conference Call Transcript

Nov 04, 2019 • 05:00 pm ET

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Veeco Instruments Inc. (NASDAQ:VECO) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Veeco Instruments Inc. Corporate Hosted Q3 2019 Earnings Conference Call. [Operator Instruction]

I would like to turn the conference over to Anthony Bencivenga Investor Relations. Please go ahead sir.

Executive
Anthony Bencivenga

Thank you and good afternoon everyone. Joining me on the call today are Bill Miller Veeco's Chief Executive Officer; and Sam Maheshwari our Chief Operating Officer and Chief Financial Officer. Today's earnings release is available on the Veeco website. Please note that we have prepared a slide presentation to accompany today's webcast. We encourage you to follow along with the slides on veeco.com. This call is being recorded by Veeco Instruments and is copyrighted material. It cannot be recorded or rebroadcast without Veeco's expressed permission. Your participation implies consent to our recording. To the extent that this call discusses expectations about market conditions market acceptance and future sales of the company's products future disclosures future earnings expectations or otherwise makes statements about the future such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors are discussed in the business description and management's discussion and analysis sections on the company's report on Form 10-K and annual report to shareholders and in our subsequent quarterly reports on Form 10-Q current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements including those made on this call to reflect future events or circumstances after the date of such statements. During this call management may address non-GAAP financial measures. Information regarding such non-GAAP financial measures including reconciliation to GAAP measures of performance is available on our website.

And with that I will turn the call over to Bill for his opening remarks.

Executive
William J. Miller

Thank you Anthony. Good afternoon everyone and thank you for joining the call. I will first highlight some of our Q3 results then provide an update to our transformation and finally give product and market updates. Q3 revenue was $109 million which was above the midpoint of our guidance. We achieved strong revenue in our front-end semi market with shipments of our second production EUV mask blank system and revenue from multiple LSA systems. Additionally sales of our Ion Beam products to the data storage market remained solid. Non-GAAP gross margin was 40.3% which was higher than our guidance range resulting from improved product mix on higher volume and well-managed expenses. We're happy to report non-GAAP operating income was $4 million resulting in earnings per share of $0.05 marking a return to profitability. Our bookings were $115 million which were driven by strength in both data storage and EUV mask blank markets.

Now I will provide an update on the company's transformation. The transformation will be completed in 2 phases: returning the company to profitability and driving growth. Phase 1 returning the company to profitability is well underway and includes our MOCVD shift from the commodity led markets to photonics and emerging